Mumbai:
The newly appointed CMD of New India Assurance, Atul Sahai, has expressed his concern over the ongoing alleged market practices, resorted to, by some of the companies violating the existing regulations in growing their motor business, the largest segment in the Rs 1.5 trillion Indian general insurance industry.
Of late, there have been unconfirmed reports that certain players have started circumventing certain regulations to garner market share in the motor business and the other players are taking up the issues at appropriate forums, said Sahai, in his first interview, with Asia Insurance Post, after taking over as the CMD of the country’s largest general insurance company in December.
`The issues in motor business that has been impacting the PSU General insurance companies is something to be taken up at appropriate forums .It is strange that a regulation that has been brought in for protecting the policyholder interest is allegedly not being treated sacrosanct by certain players. We do feel a little disadvantaged to certain extent we are hoping that necessary corrections take place at the soonest,’’ felt the NIA chief..
On the NIA’s recent performance, he said that the year to date performance has somewhat been impacted by multiple catastrophe claims in India and abroad coupled with non-operational issues like write down of the investments and impact of change in accounting policy for the company’s foreign operations.
Setting aside these one-off factors, the Indian business continues to fare reasonably well even except for the challenges in the motor business. Lines like health has shown an improvement in incurred claim ratio( ICR), he stated.Further the company showed a business growth of approximately 13 per cent in the month gone by ie February 2019.
“The immediate challenge is to the combined ratio and get back to the profitability levels we saw in recent past. On the business front we are taking steps to restore the growth in line with the market and thereby manintain/increase our market share,’’ said Sahai adding that except crop insurance, where the company has been selective, NIA is the leader in most other lines.
According to him, the company is doing reasonably well and has maintained its market share over the last five years.
“I don’t there is any need for a large scale restructuring of operations though we intend to open new offices at few places, unviable small operating offices will be closed and certain offices will be relocated. New initiative like tapping new distribution channels and leveraging technology for improved customer experience are being scaled up according to plans. I am confident that NIA will create value for shareholders in the long run,’’ he said while outlining his agenda for the company..
Close to 1000-1200 senior employees are expected to retire every year over the next few years. The NIA will indeed be recruiting but thanks to increased use of technology the net additions will be negative. The company may go for a recruitment of 300-400 young officers/assistants per year over the next few years, he revealed..
“While there have been price wars in the past, it remains an integral part of what we call an underwriting cycle. Except for the recent practices adopted by some insurers in motor I will not say that there has been an unhealthy competition and that the policyholders in general have benefitted a lot,’’ he said about the prevaling market conditions in the general insurance industry that is recording a doubke digit growth. .